Exhibit 9-4
-Refer to Exhibit 9-4.Assume the economy is currently in long-run equilibrium with the price level equal to P₃.If foreigners begin to buy more U.S.goods,the economy will,in the short run,move to which of the following equilibrium combinations of price level and Real GDP?

Question

Exhibit 9-4

-Refer to Exhibit 9-4.Assume the economy is currently in long-run equilibrium with the price level equal to P₃.If foreigners begin to buy more U.S.goods,the economy will,in the short run,move to which of the following equilibrium combinations of price level and Real GDP?

Quizplus · Accepted Answer

In the short run, an increase in foreign demand will shift the aggregate demand curve to the right, leading to a higher price level (P4) and higher real GDP (Q4).

Exhibit 9-4 -Refer to Exhibit 9-4.Assume the Economy Is Currently in Long-Run